A defendant’s costs are not an entitlement in section 84 applications

In ROJ Property & Ors v Eventpower Property [2023] VSC 268, Derham AsJ comprehensively reviewed the factors bearing on costs determinations in applications to modify restrict covenants pursuant to section 84 of the Property Law Act 1958.

In finding that the defendant had put the plaintiffs to needless expense, the Court determined that the plaintiffs should get their costs from the time the defendant had been able to assess the plaintiffs’ case and its own answer to it:

The conclusion to which I am forced is that there is some other reason for animosity between the parties that underpins the inconsistent and intransigent attitude of the defendant to the signage proposed by the plaintiffs.  This has all the appearance of a desire to frustrate the plaintiffs’ signage display intended to advertise its home building business in the western suburbs.  This attitude is reinforced by the evidence of the response to the fourth Calderbank offer, which was a rejection of the offer with a counter-offer that the plaintiffs withdraw their application for modification of the Covenant and pay the defendant’s legal costs fixed at $40,000.00 (see above [16(d)]).  Given the nature of the restriction and the defendant’s and other landowners’ contravention of it, and the obvious, might I say, lack of injury arising from the proposed change, this counter-offer reveals a cavalier approach to the application in the proceeding and one that cannot have been rationally based on the prospects of the application being successful.

This might have been an unusual case insofar as the two parties to the litigation had some history, but it serves to reinforce the point that a defendant cannot assume it will invariably be entitled to its costs, nor should it ignore reasonable offers to settle.